China Steel vice president for sales Liu Jih-gang (劉季剛) yesterday said by telephone that the recovery in prices was supported by more moderate production in China, as well as rebounding prices for raw materials such as iron ore and coal.
The steelmaker said its competitors in Europe and the US have raised their steel prices by more than NT$3,225 per tonne since last month.
China’s steel prices last month also surged by 700 yuan (US$108.25) to 1,000 yuan per tonne, bringing prices up by as much as 30 percent in the first quarter, China Steel said in a statement.
“It is impossible to say that the oversupply situation in the steel industry will never happen again, but it is mitigating,” Liu said. “We could conclude that the steel market is in its turning point in the first half of this year, given the increase in orders and support from prices,” Liu said.
Liu said the company’s orders are expected to reach between 3.35 million and 3.51 million tonnes this quarter, up from the 3.27 million tonnes last quarter.
He said that both the numbers are higher than the firm’s original estimates.
At the company’s price adjustment meeting yesterday, China Steel decided to raise its average prices for June deliveries by NT$1,483 per tonne, or 10.5 percent. Among the company’s major products, the price of steel plates is to increase by NT$1,000 per tonne and its benchmark hot-rolled sheets will be NT$1,600 per tonne more expensive, according to the statement.
The company also increased the price of cold-rolled items by NT$1,600 per tonne and raised the price of hot-dipped galvanized steel by NT$1,600 per tonne.
So far this year, China Steel has been able to raise domestic prices because of better market sentiment. The company increased prices for delivery this month and next month by an average of 3.1 percent, after it raised prices by 2.3 percent per tonne on average for deliveries last month, company data showed.
While a continued price increase will likely affect the competitiveness of firms further down the supply chain, Liu said the company’s latest pricing strategy has taken this issue into consideration, adding that other firms further down the supply chain have recently shown stable performances.
Meanwhile, China Steel said the domestic economy is expected to rebound in the second quarter as international economic sentiment continues to improve.
China Steel shares yesterday dropped 1.54 percent to close at NT$22.35 in Taipei trading.
So far this year, the company’s shares have surged 26.46 percent, outperforming the TAIEX’s 3.55 percent increase over the same period.
